Market Pulse
Author: Created: 3/10/2010 11:54 AM
Market Pulse
By Walter Murphy on 9/22/2015 8:15 AM
“Plain English”

US Equities: Historically, the daily Coppock Curve maintains its trend for at least two weeks although 18-20 days is the historical norm. The current oscillator is in its 12th day and is positioned to peak within the next 2-6 days. If so, then a new daily Coppock downtrend should last well into October. This is in harmony with our expectations for the weekly oscillator. Thus, it seems likely that an October short term low will have constructive intermediate momentum (and cycle) implications.

Global Equities: Earlier this month, the MSCI All Country World (ex US) Index fell to 239, the lowest level since reversing down from its 2009-2014 “bull market” high. At this low, the index was 19.26% below its July 2014 peak. Given the Coppock configuration, still lower lows are likely in the weeks ahead. With this in mind, the index is testing key support.

Interest Rates: We continue to count the 2013-2015 downtrend as an intermediate (A)-wave for 10-year yields. In turn, the recent...
By Walter Murphy on 9/15/2015 3:36 PM
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US Equities: When the major indexes (particularly the S&P 500 and the DJIA) make new highs and those highs are confirmed by the NYSE daily cumulative advance-decline line, the market is not likely at risk of a major decline. With the knowledge that no indicator is perfect, our sense is that this tendency will be put to the test in coming weeks and months. We say this for two reasons. First, we can make the case that there was no price/breadth bearish divergence at the highs earlier this year. Second, our Elliott Wave count for the DJIA indicates that it has completed its 2009-2015 counter-trend {D}-wave rally.

Global Equities: Earlier this month, the MSCI World (ex US) Index fell to 1663, the lowest level since reversing down from its 2009-2014 “bull market.” At this low, the index was 17.35% below its July 2014 peak. As a result, the index has violated every support trend line since both the 2009 and 2011 lows.

Interest Rates: We continue to count the 2013-2015 downtrend as...
By Walter Murphy on 9/11/2015 11:56 AM
On Wednesday, the S&P 500 fell 1.39%, the DJIA dropped 1.45%, and the NASDAQ lost 1.15%. NYSE declining stocks exceeded winners by 9:2 while the up/down volume ratio was bearish by a bit more than 5:1. The daily Coppock Curve has a bullish bias for 457 of the S&P’s 500 stocks, all of the 30 DJIA stocks, and 98 of the stocks in the NASDAQ 100.

However, the weekly Coppock Curve has a bearish bias for 387 of the S&P’s 500 stocks, 27 of the 30 DJIA stocks, and 77 of the stocks in the NASDAQ 100.

As can be seen from the above Coppock configuration, the weekly oscillator is broadly weak even as the daily indicator is broadly constructive. Viewed from another perspective, we estimate that the constructive daily oscillator for the S&P 500 will begin to run out of steam by mid-month while the deteriorating weekly oscillator is positioned to remain weak for another 7-9 weeks. Thus, we will likely have to wait for at least one more low in the daily oscillator before we begin to look for an intermediate bullish...
By Walter Murphy on 9/3/2015 7:00 PM
“Plain English”

US Equities: The DJIA’s quarterly Coppock oscillator measures the cycle degree trend and is a reflection of the expansion and contraction within the secular trend. It has been overbought and peaking since mid-2014 and is currently lower than it was last quarter. At the end of August, the quarterly oscillator was deteriorating against 28 of the 30 DJIA components and all 10 S&P sectors.

Sectors: The largest sector – Technology – was the only sector among the five largest to increase its weighting in August.

The Rest of the World: A review of 35 Dow Jones country and regional indexes showed that the three-month return was positive for only one – Ireland – at the end of August. This broad-based sell-off is reflected in the Dow Jones Global Index, which has broken down through a well-defined 2011-2015 trend channel that contained a five-wave Elliott Wave pattern. Similarly, the Dow Jones Global (ex US) Index decisively broke a key support range (218-216) and also violated its 2009-2015...
By Walter Murphy on 8/24/2015 3:22 PM
“Plain English”

US Equities: The S&P 500 has effectively breached the support trend line from the 2011 low. At the same time, the DJIA has also broken its post-2011 support line and is on the verge of doing the same to the much more significant 2009-2015 uptrend line. These trend line breaks, plus momentum and Elliott Wave considerations suggest that lower lows are still to come. From a momentum perspective, the weekly Coppock Curve is positioned to remain weak against most S&P sectors and most DJIA stocks into late September or early October. At the same time the monthly oscillators are positioned to remain weak for most US sectors – and most countries – into the second quarter of next year. Meanwhile, the quarterly oscillator, which is a reflection of the expansion and contraction of the secular trend, is peaking. Indeed, as of Friday, this oscillator is deteriorating and positioned to remain under pressure for many quarters to come.

Global Equities: For some time we have been focused on the Dow...
By Walter Murphy on 8/18/2015 8:50 AM
US Equities: So far, this has been more of a time correction rather than a price correction. That said, 2044-2039 remains important support for the S&P 500. Moreover, the support trend line connecting the February and July lows has proved its mettle in recent days; this line will be moving through 2061-2067 for the rest of August. A decisive break of 2044-2039 will complete a top formation, confirm a reversal of the post-October rally pattern, and indicate further weakness toward 1992-1972 – which involves chart, Fibonacci, and trend support.

Global Equities: Our preference is to count the Dow Jones (ex US) Global Index’s July 2014 high as the end of an ABC rally from the 2009 low. That count has been bolstered by the fact that the index’s weekly closing chart has broken below its 2009-2015 uptrend line. However, the pattern since last July is corrective; on the surface, this suggests that there is still unfinished business to the upside. Some clarity can be gleaned from the Dow Jones Global Index, which...
By Walter Murphy on 8/14/2015 10:43 AM
On Thursday, the DJIA rallies 0.03% but the S&P 500 fell 0.13% and the NASDAQ lost 0.21%. NYSE declining stocks exceeded winners by 5:4 while the up/down volume ratio was bearish by a more robust 7:4 margin. The daily Coppock Curve has a bullish bias for 280 of the S&P’s 500 stocks, 21 of the 30 DJIA stocks, and only 49 of the stocks in the NASDAQ 100.

Readers are undoubtedly aware of the recent market turmoil that many “experts” attributed to news out of China. It seems that Greece is so … yesterday. Our guess is that China is headed for the same fate as Greece as a supposed market mover.

In any event, we try to avoid getting caught up in the day’s news for at least two reasons. First, the market is a leading indicator and tends to look weeks and (more often) months ahead. A given day’s reason/excuse is nothing more than filler for the various new organizations. Second, the brouhaha of recent days reminds us of Joe Granville’s observation that “If it’s obvious, it’s obviously wrong.”

Instead,...
By Walter Murphy on 8/10/2015 3:24 PM
Last week the S&P 500 fell 1.25%, the DJIA lost 1.79%, and the NASDAQ declined 1.65%. The weekly NYSE all-issue a-d line was bearish by almost 2:1, while the up/down volume ratio was bearish by a more modest 3:2 margin. The weekly Coppock Curve has a bearish bias for 284 of the S&P’s 500 stocks, 19 of the 30 DJIA stocks, and 57 of the stocks in the NASDAQ 100. The weekly oscillator for the S&P 500 index has moved below its neutral zero line for the first time since October.

As most readers are likely aware, we have repeatedly stated that as long as the NYSE daily cumulative advance-decline line continues to confirm new highs by the major averages, the market is likely not at risk of a major reversal. As such, market pullbacks should prove to be a correction within an uptrend.

With that in mind, the two most important market peaks in recent years occurred in 2007 and 2011. The first had a breadth divergence, the second did not. The 2007 divergence was followed by a 58% loss of value to levels not...
By Walter Murphy on 8/6/2015 12:23 PM
“Plain English”

US Equities: A majority of the stocks in the broad S&P 1500 ended July at least 10% below their 52-week high even though the index itself was only 1.37% away from its all-time high. Since many observers are hung up on the notion that a 10% correction connotes a “correction” and a 20% sell-off defines a “bear market,” we should also add that over 25% (387) of the 1500 stocks finished last month at least 20% below their high. So there is clearly a “stealth” correction/bear market going on underneath the widely observed dull indexes.

Sectors: The four largest sectors – Technology, Financials, Health Care, and Consumer Discretionary – all increased their weightings in July. We view Consumer Discretionary, Health Care, and Consumer Staples favorably. Utilities, Industrials, and Energy are viewed unfavorably.

The Rest of the World: The Dow Jones Global (ex US) index had been probing its 2009-2015 weekly support trend line. A decisive breach of this trend line would be a confirmation...
By Walter Murphy on 7/27/2015 4:23 PM
“Plain English”

US Equities: The broadest measure of price is the daily cumulative advance-decline line. The NYSE common-stock a-d line is on the verge of making a year-to-date low and the all-issue a-d line is not far from doing the same. This, plus the fact that over half of the stocks in the broad S&P 1500 are 10% below their 52-week high, suggests that price has cast its vote (with indicators) that the market’s post-October uptrend has been reversed despite the S&P 500’s ability (so far) to hold support.

Global Equities: The Dow Jones Global (ex US) Index has regularly been testing its weekly 2009-2015 support trend line and our fatigued global daily cumulative a-d line is completing an Elliott Wave five-wave pattern that began in 2012. This combination suggests that both the index and the a-d line are increasingly at risk of the largest decline in months – and perhaps years. A late-summer rally will be viewed with that risk in mind.

Interest Rates: The weekly Coppock Curve for 10-year...
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